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Kraft Food ready to take on the Rs 60,000- Crore Indian Food Market

Kraft recent take over of Cadbury Scheppes has given it a solid plat form to launch its products in India mainly cookies and chocolates such as Oreo and Talebreno .Cadbury has almost 70% market share of chocolates and has been reporting double digit growth rate .The main competitors would be MNCs Kelloggs, Nestle ,Unilever and local giants Britannia , Parle,Amul and ITC .

Kraft, which snapped up Cadbury in a $19.7-billion deal last month, also announced a new reporting structure for the chocolate maker’s key executives in India.

Anand Kripalu, managing director of Cadbury India, will be part of Kraft’s Asia-Pacific team and report to Pradeep Pant, president of the new Kraft Foods Asia-Pacific region. Mr Kripalu also gets additional responsibility for South Asia and Indo-China. Bharat Puri, senior vice-president, chocolates global category team, will continue in his current role, leading chocolate for Cadbury.

“...The energy is just phenomenal in this country. The buzz is so infectious and the excitement around Cadbury in the marketplace is so evident,” Sanjay Khosla, executive vice-president & president, developing markets and global categories (Kraft Foods & Cadbury), told ET in an exclusive interview. Mr Khosla is in India on a two-day visit with his top team to meet the Indian top leadership and visit the Indian marketplace. He also met employees of Cadbury India.

The makers of Oreo and Toblerone clearly believes that it has struck a goldmine in Cadbury India, which has delivered a 20% sales growth and a 30% jump in profit in the past three years. Cadbury also has a 70% market share in chocolates and a 30% share of the local confectionery market.

“In India, the intention is to build on what is already built. We have had discussions on Monday and this is of strategic importance to Kraft. At this stage, we are just taking a look at the exciting business and seeing how we can scale it up further. We will look for opportunities down the line,” Mr Khosla added.

Cadbury’s entrenched brand position and a large distribution network have provided the Illinois-based foods giant with a once-in-a-lifetime opportunity to increase growth in emerging markets. Cadbury got 38% of its growth from emerging markets. The figure for Kraft is a low 20%.

But Kraft also realises the pitfalls of competing in a market as diverse and competitive as India. The packaged processed foods segment is estimated to be worth about Rs 60,000 crore. Though it is growing at about 14-15% every year, it is intensely competitive, with multinational giants such as Nestle, Unilever, Kellogg pitted against domestic successes such as Parle, Britannia, Amul and ITC Foods. The advertising and marketing expenses are high and the success rate’s low.